Investors are increasingly on edge following a global selloff in equities last week sparked by renewed concerns of slowing growth in China and tumbling oil prices that have caused deflationary pressures in the economy and made U.S. central bank policymakers to question raising interest rates in September amid an economic environment of low inflation.

The Dow Jones lost 531 points, its worst week in 4 years.

The NASDAQ dropped 3.52 percent on Friday alone while major European stock indexes all sunk over 2.75 percent with the CAC French stock market index falling by 3.19 percent.

Crude oil briefly fell below $40 a barrel last week, a technical level of support, and touched $39.86, the first time since 2009 following the release of weak Chinese and U.S. manufacturing data combined with a report last week that revealed U.S. oil supplies rose more than expected amidst a stock pile buildup.

Due to an abundance of oil in the market combined with signs of slowing growth in China, the possibility of more oil coming into the market if Iran sanctions are lifted, and no new OPEC meeting scheduled until December 4th, crude oil futures are floundering and searching for support.

Last week it was reported that Chinese manufacturing was weaker than expected in August with the preliminary Caixin China manufacturing (PMI) index showing a drop in August to 47.1, setting a new 77 month low, despite efforts by China’s central bank to stimulate growth in 2015.

Many economists are hoping that the latest string of weak economic data in China will spur China’s central bank to add more stimulus or change the reserve requirements with banks to encourage more spending across the broader economy.

Weak U.S. Manufacturing Data

Markit reported on August 21st that U.S. manufacturers signaled the slowest improvement in business conditions for 22 months in August.

Markit Flash U.S. manufacturing (PMI) dropped to 52.9 in August from 53.8 in July, the lowest level since October 2013.

The latest reading in production volume was also the weakest since January 2014 when a weather related slowdown was largely to blame.

Tim Moore, Senior Economist At Markit, commented about the recent drop in U.S. manufacturing data and pointed to a weak rise in price pressure alongside a strong U.S. dollar and slump in commodities.

“With the headline PMI swiftly losing ground after a modest rise in July, the latest figure now points to the weakest overall pace of manufacturing growth for almost two years” Moore said in a released statement.

“According to survey respondents, the strong dollar continued to put pressure on export sales and competitiveness, while heightened global economic uncertainty appeared to have dampened client spending both at home and abroad. Alongside this, manufacturers of investment goods widely cited growth headwinds from the slump in capital spending across the energy sector” Moore added.

“Sluggish manufacturing demand conditions and subdued cost pressures resulted in further restraint in terms of factory gate prices during August. Output charge inflation has broadly flatlined this summer and remains close to the lowest recorded by the survey over the past three years” Moore explained.

Moore said that due to the lack of growth momentum and continued weak price pressure across the U.S. manufacturing sector, it “adds to the dovish argument” as Fed policymakers consider a rate hike in September.

Bond and currency traders seem to agree with that dovish sentiment about U.S. monetary policy.

Last week the U.S. dollar fell to its biggest 2 week decline in 2 months and the yield on the 10 year Treasury fell to the lowest level since April 30th and is currently at 2.05.

On Thursday August 27- Saturday 29th central bankers will convene in Jackson Hole, Wyoming for the Jackson Hole Economic Symposium, an annual symposium.

Fed Chair Janet Yellen is not expected to attend the event but Fed Vice Chair Stanley Fischer is expected to attend and investors will be listening for signs that the Fed is not ready to hike interest rates in September.

Strong and Steady Manufacturing in Eurozone

Despite weaker manufacturing growth in China and the U.S., the latest manufacturing results last week from the 19 member eurozone looks encouraging.

Markit reported on August 21st that eurozone economic output remains strong and steady.

Markit Flash Eurozone PMI climbed to 54.1 in August, up from 53.9 in July, marking a 2 month high and remaining at an expansionary level for the 26th consecutive month.

Flash Eurozone Services PMI Activity Index also reached a two month high and moved up to 54.3 in August, up from 54.0 in July.

Job creation hit a 44 month peak.

Rob Dobson, Senior Economist at Markit, expressed optimism about pace of economic and job creation in the eurozone despite some of the turbulence and uncertainty over the Greece debt bailout deal in recent weeks.

“The flash PMI suggests that the eurozone is still experiencing one of its best periods of economic growth and job creation during the past four years” Dobson said in a statement.

“Stronger growth in Germany and outside of the ‘big two’ nations were the main growth spurs in August. Particularly pleasing is the continuation of job creation seen in these nations, especially in the ‘periphery’ where some countries are still struggling with double digit rates of unemployment” Dobson added.

“On that score, it was disappointing to see further job losses reported in France. However, with output growth registered for the seventh straight month and backlogs of work rising, hopefully this trend will improve in coming months” Dobson said.

Week Ahead

U.S. investors will be eyeing a string of housing data on Tuesday with new home sales for July and the Case Shiller 20 city index from June.

Consumer confidence for August will also be reported on Tuesday.

On Wednesday investors will pay attention to latest numbers of durable orders for July and crude inventories.

On Thursday the second estimate for 2015 GDP growth will be released for the 2nd quarter.

The market expects 3.1 percent growth which would be higher than 2.3 percent in the prior first estimate.

On Friday personal spending and personal income for July will be reported in addition to PCE prices for July and Michigan Sentiment.